Investments tips in a volatile market

[TOGWT]

INVESTMENTS TIPS FOR 2008:

With all the turmoil in the market today and the collapse of Lehman Bros and Acquisition of Merrill Lynch by Bank of America this might be some good advice. For all of you with any money left, be aware of the next expected mergers so that you can get in on the ground floor and make some BIG bucks.

Watch for these consolidations in later this year:

1.) Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W R. Grace Co. Will merge and become:
Hale, Mary, Fuller, Grace.

2.) Polygram Records, Warner Bros., and Zesta Crackers join forces and become:
Poly, Warner Cracker.

3.) 3M will merge with Goodyear and become:
MMMGood.

4. Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will merge and become:
ZipAudiDoDa . 5. FedEx is expected to join its competitor, UPS, and become:
FedUP. 6. Fairchild Electronic s and Honeywell Computers will become:
Fairwell Honeychild. 7. Grey Poupon and Docker Pants are expected to become:
PouponPants. 8. Knotts Berry Farm and the National Organization of Women will become:
Knott NOW! And finally...

9. Victoria 's Secret and Smith &Wesson will merge under the new name:
TittyTittyBangBang

[dengood1]

haha........funny!

[sal329]

Lol TOGWT you come off a serious person it is nice to see a post with a joke (please do not take that offensively at all)

[ScottB]

I needed this post after working thru all the financials and industry news.

[Smokin]

good one:Im the MAN

[PaintPolisher]

Thanks :goodpost:

al

[Surfer]

I needed this post after working thru all the financials and industry news.You and I both ;) :D

[YankeeFan]

Lol TOGWT you come off a serious person it is nice to see a post with a joke (please do not take that offensively at all)

Ditto

[Darren F]

Well if anyone wants some real advise look into a Fixed Annuity....They are guaranteed to never lose principal, tax deferred, can generated income for the rest of your life after you turn 59 1/2, they are asset protected and no probate if you die...

[Meghan]

Well if anyone wants some real advise look into a Fixed Annuity....They are guaranteed to never lose principal, tax deferred, can generated income for the rest of your life after you turn 59 1/2, they are asset protected and no probate if you die...

I like the idea of putting money away and not touching it till 59, just hope I make it that long to enjoy it!:D

[Bert31]

Well if anyone wants some real advise look into a Fixed Annuity....They are guaranteed to never lose principal, tax deferred, can generated income for the rest of your life after you turn 59 1/2, they are asset protected and no probate if you die...

If you decide on an annuity, just be very certain to investigate the fees. Fees and commissions on annuities can be insane. There have been cases where financial periodicals have reported where some the fees as high as 12% In that case, you are pretty much giving all the earnings on your investment to the insurance company/finance company. You would have done better putting your money in a no interest checking account over the years.

They also fund some fees as low as 1% which is comparable to the fees you would pay for no load mutual funds but with mutual funds you don't get the assurance of not outliving your money like with annuities. The industry average is 6% which in my opinion still eats too much into your earnings but I guess if you are really worried about outliving your money, then I guess it is worth it to you. I invest with no load index mutual funds. I realize there will be some times when my funds take a dip but when you have a long term horizon (probably won't retire for 40 years) you can take the good times with the bad times. I am still up a decent amount from one I first started investing after high school 13 years ago.

[ScottB]

the issue with annuities are across the board, and the post above is one that is not correct when dealing with a "fixed" annuity. "Variable" and "Indexed" annuities have CDSC charges (getting out early) and have a higher fee schedule on the backend versus the mutual funds purchased alone. That said they do offer some guarantees that your mutual fund portfolio doesnt and well worth the cost to some individuals. Does your mutual fund offer a high water mark for death benefit to survivors ?? Does your mutual fund offer a living rider ?? Does it offer an option to annuitize and guarantee a payment for the rest of your life once retirement or disability sets in ??

As for mutual funds, there are no load (which means no fee upfront) but yet higher costs in the rear where usually hidden in a prospectus that reads like a balance sheet and would need an accounting degree to decifer. In alot of cases paying for your mutual fund upfront makes sense and share class (A,B,C, Y)will determine costs and required holding periods. Obviously a well diversifed portfolio is a must and meeting with your advisor twice a year will bring additional understanding and can move holdings in a bad sector.

Now to finalize my rant, lets discuss "fixed" annuities. The only reason for such a vehicle is actually tax deferreral. Typically these programs offer a great teaser rate or a guarantee for a couple years, but have a drop off period on the backside where they can (and usually will) drop to floor rate. These are typically in the 2% area (floor) and always pay based upon long term bond rates, well under as thats what the annuity company usually purchases with them. The other benefit is most are protected by State Guarantee's also and thus if the insurance company fails then the insurers in the state all have to fund the losses.

Never take financial advice from a forum ... no offense ... look to a licensed individual or firm and check the licenses thru FINRA for added protection. Not knocking any of the posts before it but proper profiling and risk assessments are needed before steering anyone to a particular investment.

[Bert31]

and the post above is one that is not correct when dealing with a "fixed" annuity.

What was incorrect about it? All annuities have fees, otherwise financial firms would not offer them. You just need to make sure you watch the fees related to your investments, annuities particularily.


Never take financial advice from a forum ... no offense ... look to a licensed individual or firm and check the licenses thru FINRA for added protection. Not knocking any of the posts before it but proper profiling and risk assessments are needed before steering anyone to a particular investment.

You need to be careful here also. If you go to a financial planner who receives a commision off of products he sells you, you need to question if he is looking out for your interests or his interests. Here is where I tell people to be very cautious with annuities. Brokers love them due to the commision they generate. If you need professional advice, I would recommend going to a non commisioned, fee only investment advisor. This advisor will charge you by the hour and makes nothing off what you decide to invest in. He/she has not incentive to not be looking out only for your interests.

To take this one step further, educate yourself on investing so you don't have to rely 100% on someone else for your financial well being. In college I took an investment theory course which was outstanding and where I was first warned about checking out fee schedules of investments, particularily annuities.

Being a CPA I also used to work in public accounting with clients who had investments so I had to get training on the subject. I now am the head of financial reporting for two not-for-profits one of which has a $10 million endowment which is primarily in equities and fixed income investments so I have "kept up" with investing. Saying all that, despite all this formal training I have received, I still learn even more just doing my own research on the internet. Even the most novice person on investments could get a decent footing educating themselves but doing some searches on the popular financial websites. Almost all of them offer an area for beginners.

[ScottB]

fixed annuities do not have a typical fee schedule in the way you suggested above. The annuity company pays the brokers commision upfront (not the purchaser) and the interest is indeed inclusive of fee's and commisions but also tied to long term rates otherwise could not be competitive. In order to be viable they must offer benefits to entice clients from cds and other products. Tax deferral is one, annuitizing another, and obvious offering a floor rate similar to base interest rates is another. Thus the fee's are actually quite limited whereas on the variable annuity can be spread against the investment choices. An insurance company must keep these (fixed annuity proceeds) investments in very safe and guaranteed products to avoid exposure but it does allow them opportunities to divert more cash from other products (like car insurance) into the market for better returns.

As for your comment on not seeking the advice of a professional broker, or they will only entice you to what makes them money. Come on ... seriously most dont want complaints on their license nor will they stay in business for the long haul if complaints and settlements add up. Remember FINRA must report all complaints and even challenges even if resolved in brokers favor and thus a set of checks and balances in place for clients to use and I suggested it above. I guess the blanket statement that all accountants cheat the system and show clients how to avoid paying fair taxes would equate to your comment. I believe in all professions there is more good than bad !

The rules are simple for most individuals, you dont go to a broker for legal advice you visit your attorney. You dont go to your lawyer for accounting advice you visit your accountant. And you dont visit your accountant for investment advice you visit a qualified broker. They all should and can work in tandum to help grow a clients well being if the client carefully chooses each and asks for recommendations and checks their records. Infact in some states breaking this code can bring penalties and liability to that professional.

In closing as this is not one profession against another, it is giving the client more information which leads to better choice. I am all for a client doing their own homework and following thru, but the stats show that most dont do that (they give up as consumed by confusion) or the ones that do it on their own lose and give up. Using someone qualified is a good option but must be handled with care.

[Darren F]

I am an accountant and a licensed individual for Health Insurance, Life Insurance and Annuities....the annuity product I am talking about is one that I have my own money in. There are no fees at all, there are surrender charges if you want to withdraw more than the allowable 10% a year...It is also a 10 year product so you have to be willing to have it tied up for that long....If you want more information about it I would be more than happy to E Mail information to anyone that asks.